Would hire a financial advisor if you won the $1 billion Mega Millions?

[QuarterMillionMan]

Ha-ha, bummers. It did cross my mind that anything is possible but not highly likely.

[QuarterMillionMan]

And if it was DS he would not be on saving advice but would be consulting with his attorneys on what next (ie, lump sum, putting the $$$$$$$$$$ in a trust, etc).

[QuarterMillionMan]

I got mine's, do you have your's for tonight's drawing?

[Saakasports]

Yeah, having a financial advisor seems like a smart call to me. I mean, when you've got that kind of cash on the line, it's natural to feel a bit lost. Having someone who's been around the block with managing big bucks could really help keep things on track and growing in the right direction.

[QuarterMillionMan]

I would hire an attny to create a trust for the funds, but I wouldn't hire a financial advisor. But I would hire an accountant or CPS to file my taxes at the end of the year to keep the IRS from breathing down my neck.

[QuarterMillionMan]

Someone in Oregon won $1.3 billion. Overnight billionaire.

[scfr]

One again I'm $2 richer for having NOT played.

[QuarterMillionMan]

Powerball's $1.3Billion lucky Oregon winner is revealed (msn.com)

[kork13]

Powerball's $1.3Billion lucky Oregon winner is revealed (msn.com)

I briefly saw a news alert about this guy. Laotian immigrant, dealing with cancer for most of a decade? I hope the money serves him & his family well.

[LivingAlmostLarge]

Wow that's crazy!

[QuarterMillionMan]

CNBC just reported that a Mega Millions ticket will cost $5 a ticket but w/increased odds and higher jackpots. Will you still buy or no? If the jackpot is high I might buy 1 ticket but not multiple tickets.

[myrdale]

CNBC just reported that a Mega Millions ticket will cost $5 a ticket but w/increased odds and higher jackpots. Will you still buy or no? If the jackpot is high I might buy 1 ticket but not multiple tickets.

I currently purchase a multi draw ticket for a single set of numbers. 26 drawings at $2 per drawing. At 2 drawings per week, that is $208 per year I believe. I list that cost in the Entertainment category of my budget.

With the ticket price being increased to $5 per ticket, that would be $520 per year. That is too high for me to justify it.

Honestly the lottery is a tax on the poor and the financially illiterate. That said, I understand what 1:300,000,000 odds are. I understand the chances are I will never win.

I am not sure I have shared this story here, but my father did have all of his numbers land for a $13M drawing back in 2009 or so. He played the same five sets of numbers for about 20 years. We would drive to Florida once every couple of months for him to purchase tickets. His schedule was changed at work so he wasn't able to go down there for a three month period, June, July, August. In September he returned to his old schedule and resumed purchasing tickets. Into September when checking his numbers, he realized that during that three month period which he didn't have a ticket, all 6 of his numbers landed at once on a drawing. Had he bought the ticket, of course the numbers wouldn't have landed. And four years later he'd still most likely have died of cancer.

At the end of the day, I think the price increase is a bad play. I think it is a money grab move. Only 50% of lottery sales is returned to the various winners. The rest of the proceeds is split among the various lottery commissions.

[Tabs]

Not that anybody asked, but I got curious and decided to see how much they would take out in taxes for a $1.3 billion jackpot. Please keep in mind this is all just napkin math for the sake of casual conversation and amusement:

* $1.3 billion is the advertised annuity total. The lump sum however, according to one online source, is closer to 48% of that, which is listed as $621 million.

* For Oregon, portions of any winnings over $5000 are automatically deducted for taxes, 8% for state and 24% for federal. Kind of surprisingly low for such a large sum. Still, after state and federal withholdings, that leaves $422 million.

* There will be "transitional fees" such as hiring a personal assistant to create a degree of separation between you and family and friends who are going to suddenly come out of the woodwork when they find out about you and your Powerball winning. You'll likely also want to get guard dog lawyers, CPA, and even some actual muscle for security in the interim.

* Also, you will likely want to spend some of that, say a nice new house somewhere, where it's much safer and in a better location. Maybe even a nice car. Can say $12 million be enough to budget for all that transitioning? I hope so.

* Still leaves $410 million for investing purposes. Obviously, one should do better than what I am suggesting here, and this is where asking for a financial planner is key, but for simplicity sake, let's say you put it all into JNJ stock, which gives you an annual dividend of 3.07%, or $12.5 million a year.

* After taxes and FICA (calculated for Oregon since that's where the winner of this Powerball is) it's a little over $6 million take home (I had to extrapolate a bit since the calculator I am using maxes out at $10 million), or roughly $500k in monthly budget.

Yeah, $500k monthly budget would be quite the game changer. I wouldn't have to worry about wanting to go to the Cheesecake Factory once in a while.

Too bad I also don't play. It's fun to imagine, but nah, we succeed based on plans rooted in reality, not dreams rooted in fantasy.

[stomback]

Putting the winnings in a trust sounds like a smart move, especially with those taxes biting into it. I’d probably go for a financial advisor, though.

[QuarterMillionMan]

Here we go again tonight's jackpot is over $1 billion. The price will be increasing this year from $2 to $5 per ticket. I'll get some after work tonight.